Housing plan dropped

Affordable housing project in Laie ditched

An affiliate of the Mormon church has scrapped plans to build up to 650 homes on Oahu's North Shore.

Hawaii Reserves Inc., the land management company of the Church of Jesus Christ of Latter-day Saints which purchased 890 acres in Malaekahana between Laie and Kahuku to build a master-planned affordable-housing community, decided its plan isn't feasible after working on conceptual plans, countless estimates and feasibility studies.

However, the company is moving forward with a project to replace the 48-room Laie Inn with a 220-room hotel, which is expected to be operated by Marriott International Inc. The hotel, estimated to cost between $30 million and $35 million, is expected to break ground by mid 2009 and open in 2010, said Eric Beaver, Hawaii Reserves president and chief executive officer.

The housing project was estimated to cost between $300 million and $400 million, with infrastructure alone expected to total $200 million, he said.

"It gets harder and harder to make those kinds of projects pencil," he said, adding that the credit crunch has exacerbated the situation. "That, coupled with fairly moderate support in the community, everything combined to say this is not the right time to be pursuing this."

Pane Meatoga Jr., president of the Laie Community Association, said the community is in dire need of affordable housing, with as many as 20 percent to 30 percent of multifamily households living in a single-family unit.

"It's sad because we worked hard all these years, over 20 years trying to get a housing project and then to go this far and then stop the project," Meatoga said. "But to me it's a blessing in disguise because it gives us an opportunity to stand on our own two feet."

"If or when Hawaii Reserves revisits another housing project depends on market factors, the political climate, community support and costs, which become unaffordable after land, infrastructure, material, labor and administrative expenses are factored into an affordable housing development, Beaver said.

"That is the crisis in Hawaii how do you build something that's affordable?" he said.

Kaaawa resident K.C. Connors said she feared HRI's development would have caused even more traffic jams on Kamehameha Highway and change the rural character of the area.

"We're just ecstatic because we didn't want the plan," she said. "It looked to us that their housing plan would make one huge town all the way from Laie to Kahuku we thought this would ruin the country."

"Aaron Campbell, a partner of Malaekahana Hui West LLC, which is planning to build affordable homes on 455 acres it owns on the Kahuku end of Malaekahana, North of the Hawaii Reserves parcel, said the company's decision to withdraw its plan reflects the difficulty of affordable housing in Hawaii.

"It is difficult because most developers make their margins on the building and if you're going to provide an affordable product you need to get land at a good price, build infrastructure at a good price and build homes at an affordable price," said Campbell, a 1989 Kahuku High School graduate. "It's very difficult but, whether or not the economy is bad right now, the fact remains that people need housing, it's not going to go away."

"Hawaii Reserves, which owns a total of 6,500 acres in Malaekahana and Laie, bought 663 acres for about $10 million in 2003 and another 227 acres for nearly $4 million last year for the proposed residential development, which ran from Kamehameha Highway up to the mountains.

The company plans to renovate the Laie Shopping Center and hold on to the parcels slated for development, which are currently being used for agricultural and grazing operations.